The Biobased and Renewable Products Advocacy Group (BRAG) helps members develop and bring to market their innovative biobased and renewable chemical products through insightful policy and regulatory advocacy. BRAG is managed by B&C® Consortia Management, L.L.C., an affiliate of Bergeson & Campbell, P.C.
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On January 16, 2014, the U.S. Department of Justice (DOJ) announced that it has indicted two individuals in biodiesel fraud schemes worth more than $37 million. A copy of DOJ's press release is available online. James Jariv and Nathan Stoliar have been charged with 57 counts of conspiracy, wire fraud, false statements made under the Clean Air Act, obstruction of justice, and conspiracy to engage in money laundering. In one scheme, the two allegedly generated more than $7 million in fraudulent renewable fuel credits under the federal Renewable Fuel Standard (RFS), which were then sold to obligated parties that needed them to meet their annual renewable volume obligations (RVO) under the RFS. In another, they allegedly failed to provide the U.S. government with $30 million in renewable fuel credits.


This case is significant because it is the fifth major biodiesel Renewable Identification Numbers (RIN) fraud case since 2011. It comes at a time when (1) EPA is working to prepare in final its proposed RFS Quality Assurance Plan to avoid cases of RIN fraud; (2) the biodiesel industry is advocating for increased biodiesel RVOs over what EPA has proposed for 2014 and 2015; and (3) the biofuels industry is fighting to sustain confidence in the RIN market and the statutory RFS RVOs in all renewable fuel categories. It could provide RFS opponents, including many in the refining sector, an additional argument in their quest to repeal the RFS.
 


 
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On January 23, 2014, EPA issued letters to the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM) partially answering their October 2013 petitions for consideration of the final rulemaking, "Regulation of Fuels and Fuel Additives: 2013 Renewable Fuel Standards; Final Rule," published in the Federal Register on August 15, 2013. In its letters, EPA explains that it is granting the petitions by AFPM and API for reconsideration of the 2013 cellulosic biofuel standard under the RFS. EPA explained that it came to this decision in light of KiOR, Inc.'s downgraded production projections for 2013. KiOR has been the largest U.S. producer of cellulosic biofuels, and EPA largely depended on the availability of the Company's projected volumes to help ensure obligated parties under the RFS could meet their 2013 cellulosic biofuel requirements.


While welcomed by API and AFPM, this announcement comes at a time when the biofuels industry -- and the cellulosic biofuels industry in particular -- is under increasing attack by API, AFPM, and other stakeholders in the refining, agriculture, and food sectors. Several leaders within the biofuels industry had urged EPA not to grant the petitions by AFPM and API for reconsideration of the 2013 cellulosic biofuel standards under the RFS.
 


 
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On January 22, 2014, the largest U.S. biodiesel producer, the Renewable Energy Group, Inc.® (REG), headquartered in Ames, Iowa, announced that it has acquired renewable chemical producer LS9, Inc. for over $61 million. LS9 will be renamed REG Life Sciences LLC and will produce renewable chemicals and products. A copy of REG's press release is available online.


 
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It is reported that Research and Development non-profit Battelle, headquartered in Columbus, Ohio, has a pilot project in which an 18-wheel tractor trailer would be used to convert biomass onsite using a catalytic pyrolysis into oil that could be used to produce renewable chemicals or biofuels. This model could be used throughout the country to help facilitate the conversion of myriad types of biomass into oils for renewable chemicals and biofuels production in a cost effective manner. It would eliminate the cost of transporting massive amounts of biomass to production facilities and reduce the need for much more expensive commercial production facilities.


 
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On January 22, 2014, there were reports of two explosions at the JNS Biodiesel LCC biodiesel plant in northern Mississippi. No one was injured. The plant is designed to use poultry fat as the feedstock to produce eight million gallons of biodiesel each year. The news comes as the biodiesel industry is advocating its potential production beyond EPA's proposed 2014 and 2015 requirements.

Tags: biodiesel

 
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A research team from the University of Wisconsin at Madison reportedly has developed a promising process using a renewable chemical for biofuels production. Under the process, the researchers used biobased gamma valerolactone (GVL) to break down plants and produce sugars for the production of biofuels. The use of the biobased material could make the process more sustainable and affordable. The findings are published in the January 17, 2014, issue of the journal Science.


 
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Boeing has been working to find sustainable jet fuel. In 2011, for instance, the Company worked to include a blend of up to 50 percent aviation biofuel in international jet fuel specifications. On January 14, 2014, Boeing announced that it "has identified 'green diesel,' a renewable fuel used in ground transportation, as a significant new source of sustainable aviation biofuel that emits at least 50 percent less carbon dioxide than fossil fuel over its lifecycle. The company is working with the U.S. Federal Aviation Administration and other stakeholders to gain approval for aircraft to fly on green diesel, further reducing the aviation industry's carbon emissions." A copy of the Company's press release on this announcement is available online.


 
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The 5th Annual Next Generation Bio-Based and Sustainable Chemicals Summit takes place Tuesday through Friday, February 4-7, 2014, in sunny San Diego, California. The premier biobased and sustainable chemicals information and networking event for biobased start-ups, global chemical majors, brand owners, feedstock providers, venture capitalists, and academics will feature a Keynote address by Kaj Johnson, Green Chef and Senior Director of Product Development from Method, who will speak about Sustainability by Design, and nine Real-World Case Studies from Novomer, Genomatica, POET, PSA Peugeot Citroën, Succinity GmbH, RSC Bio Solutions and Waste Pro USA, Novasep, and ENVIRON and Sigma-Aldrich will be provided.


Tuesday's pre-conference program is a strategic business forum dedicated to "Policy, Economics, Investment and Global Partnering to Support the Growth of Bio-Based Industry." Sessions will cover critical business issues for biobased products, including obtaining capital, developing global partnerships, and a presentation on the "Regulatory Opportunities and Challenges on the Road to Commercialization" by Lynn L. Bergeson.


Wednesday's pre-conference forum is titled "Moving Bio-Based Chemicals Beyond Technology: Fitting Bio-Based Materials into the Larger Picture of Global Sustainability" and will feature case studies and panel discussions, including "The Commercialization and Adoption of Readily Biodegradable, Biobased Functional Fluids and Cleaners" and "NGO Perspective for Evaluating Bio-Based Materials & Importance of their Role in the Industry."


The main summit gets underway Thursday with a keynote panel discussion, "Spurring Market Adoption -- Brand Owner and Chemical Major Perspectives," moderated by summit chair and Executive Director of Biobased and Renewable Products Advocacy Group (BRAG™) Kathleen M. Roberts. Over the two-day program, attendees will learn from a myriad of the leading business innovators in biobased and renewable chemicals, including Sherwin-Williams, International Paper, IBM, Myriant, Beta Renewables, Virdia, ARPA-E, Avantium, Elevance, Bioamber, Metabolix, DSM, Seventh Generation, and more.


For more information and to register, visit the website. BRAG members and friends can receive a 15% discount on registration -- contact .(JavaScript must be enabled to view this email address) to receive your discount code.
 


 
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Intuitively, entities in the "biobased" space may think the "naturally occurring" substance exemption under the Toxic Substances Control Act (TSCA), the law that governs chemical products in the U.S., applies to their "biobased" materials. The scope of the exemption is limited, however, and complications arise when companies mistakenly assume a material is naturally occurring and therefore exempt from TSCA.


Learn more about this important issue online.
 


 
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As the new year begins, there are several predictions on the path for reform of TSCA. The vehicle for reform is expected to be S. 1009, the Chemical Safety Improvement Act (CSIA), bi-partisan legislation introduced last year by Senator David Vitter (R-LA), Ranking Member of the Senate Committee on Environment and Public Works (EPW), and the late Senator Frank Lautenberg (D-NJ). Senator Vitter and Senator Tom Udall (D-NM) are now working to move CSIA forward through the legislative process. A Law360 article recently published by Lynn Bergeson contains a detailed discussion of the significance and provisions of this legislation. With 25 bipartisan co-sponsors, CSIA is a "potentially politically viable framework for TSCA reform and renewed hope that badly needed modernization of this ancient law may occur."


Recently, Senator Vitter stated publicly that he expects to be able to move CSIA through the Senate toward passage this year. That task will face challenges. CSIA, or any TSCA reform legislation, will need to first pass the Senate EPW Committee. Its Chair, Senator Barbara Boxer (D-CA), is seeking amendments to limit CSIA's preemptive effect with respect to tougher state chemical laws like California's Proposition 65 and the Safer Consumer Products Regulations.
 


 
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Several incentives designed to encourage renewable energy development and production, including the $1 per gallon tax credit for biodiesel producers and the $1.01 per gallon credit for cellulosic ethanol production, expired on December 31, 2013. Should extenders be considered, it is likely these two credits will be extended and likely retroactively. Although given election year politics and ongoing budget battles, if and when this happens is tougher to predict. In the short term, one legislative vehicle could be legislation to increase the debt limit expected to pass later this winter or early spring. Some argue Congress may not consider any tax extender package until later this year after the November elections.


The biofuels industry is working hard to press Congress quickly to take up and pass a tax extender package. The biodiesel and cellulosic producer tax credits are considered essential parts of the suite of current policies designed to promote the industry.
 


 
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On December 18, 2013, President Obama announced that he will nominate Senator Max Baucus (D-MT) to be the next Ambassador to China. The nomination is expected to pass quickly and without much opposition. Senator Baucus serves as the Chair of the Senate Committee on Finance, the tax writing Committee. When he leaves the Senate, current Senate Committee on Energy and Natural Resources Chair Ron Wyden (D-OR) is expected to assume the chairmanship.


These moves will impact the fate of incentives for the biofuels and renewable chemicals and products industries, including whether and when the Senate considers a tax extenders package, or tax reform, among other tax policies impacting the industry.
 


 
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On December 19, 2013, President Obama announced his intent to nominate Janet McCabe to lead the U.S. Environmental Protection Agency's (EPA) Office of Air and Radiation. She has been serving as Acting Assistant Administrator of the Air and Radiation Office since July when Gina McCarthy left to become EPA Administrator. McCabe is generally well-liked and respected, and she is expected to be confirmed without much opposition. McCabe is expected to face tough questions during her nomination hearing on several policies, including EPA efforts to reduce greenhouse gas emissions.


President Obama will need to re-nominate his choices to fill key positions at EPA and other agencies because of unsuccessful attempts to allow pending nominations -- including several that have already cleared the Senate EPW Committee -- to carry over to this year. Nominees affected include Ken Kopocis, who had been nominated to serve as EPA Assistant Administrator of Water.
 

Tags: EPA, EPW

 
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There have been several efforts in the last few weeks to convince the Obama Administration to reconsider its proposal to reduce the 2014 Renewable Fuel Standard (RFS) statutory renewable volume obligations (RVO) for advanced and total renewable (corn ethanol) biofuels, and to maintain in 2014 and 2015 the status quo for biodiesel. Senators David Vitter (R-LA) and Benjamin Cardin (D-MD) are expected to introduce a bill in the coming weeks, which would amend the RFS and reduce its corn ethanol targets.


On December 18, a group of 16 Senators met with EPA Administrator Gina McCarthy to urge EPA to maintain the statutory 2014 RFS RVOs for advanced and total renewable fuels. They argued that the proposed reductions are unnecessary given expected production and that they would harm their respective state economies and the energy diversity and security of the United States. On the same day, Senator Heidi Heitkamp (D-ND), who had attended the meeting, sent a letter to Administrator McCarthy expressing her concerns about EPA's RFS proposed rule. A copy of the letter is available online.


Also on December 18, 2013, 54 Members of the House of Representatives from 24 states sent a letter to the leaders of the EPA, U.S. Department of Agriculture (USDA), and Office of Management and Budget urging that the RFS final rule increase the required volumes of biodiesel. A copy of the letter is available online.


On December 20, 2013, the Governors of six Midwestern states sent a letter to President Obama expressing their concerns about the RFS proposed rule. They also urged the Administration to maintain the statutory RFS RVOs for total renewable fuel and raise the biodiesel requirements for 2014 and 2015. A copy of the letter is available online.
 

Tags: RFS, RVOs

 
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LignoTech Developments Ltd. subsidiary Xylemer BioProducts of New Zealand will soon open a new facility in Kearney, Nebraska. The facility will produce biomass-based resins. Distillers grains will be the first feedstocks used, likely followed by sugar beet pulp and rice hulls.


 
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